Exiting, Stage Left and Right

Private equity firms have gone on a deal run, not just buying, but making plenty of exits in 2012.

All told, LBO shops completed more exits than at any point in the last decade, according to research by Pitchbook set to be released today.

The 626 total exits, encompassing everything from lower-middle market deals to large-cap transactions to undisclosed acquisitions, represents the most at any point in PE’s recent history, even including the boom years that preceded the 2008 financial crisis.

Part of what helped boost PE’s exit pace, says Adley Bowden, Pitchbook’s Director of Research & Managing Editor, was the volume of secondary transactions–which has increased as the economy has recovered.

Secondary buyouts now make up nearly 25% of all deals, Pitchbook’s data showed, as of the fourth quarter of 2012. That figure hovered between two and seven percent for much of 2008 and 2009, but has been rising steadily since 2010 began.

While the secondary buyout increase represents more sponsor-to-sponsor deals, private equity firms also have amassed plenty of dry powder—pegged by Pitchbook last year at $432 billion—to conduct deals.

News of increased exits is likely welcomed by limited partners, who, according to the study, have seen PE portfolios nearly triple to include 6,538 companies by the end of 2012, up from a figure of about 2,300 in 2004. Part of the reason for this is the LBO boom that continued from 2006 to 2008, allowing PE firms to stack up portfolio companies.